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Financial Literacy - An Essential Life Skill

Financial Literacy - An Essential Life Skill

April 18, 2023

Since 2003, when the Senate first passed a resolution designating April as Financial Literacy Month, a wide range of outreach and education programs have been developed for the public and private sectors focused on helping Americans of all ages improve their knowledge and understanding of financial issues.

We recognize and appreciate the significance of having a month that is specifically dedicated to bringing awareness to financial literacy and the importance of possessing this life skill. Financial Literacy basically means having the skills and knowledge to manage money effectively and understanding a range of money topics from income, budgeting, saving, and investing to debt management, interest rates and credit scores. To get an idea of where you stand when it comes to your financial know-how, ask yourself some basic questions.

  • Do you know how much money you spend for living expenses and can you create a monthly budget that includes all your bills and debts?
  • Do you have an emergency fund in place for large, unexpected expenses?
  • Do you understand how compound interest works – both earned and owed?
  • Do you know the difference between insurance and investments and how they impact your Financial Plan?
  • Are you debt free? If not, do you know in what order you should pay down your debts?
  • Are you familiar with how insurance can protect your assets?
  • Are you able to align your financial goals with your life goals?
  • Are you comfortable discussing money matters with your family?

If you answered “no” to any of these questions, take this opportunity to expand your fiscal knowledge and improve how you manage your money. You may want to start by visiting our website for newsletters, market updates and videos on topics that can help you become more confident about your financial decisions.

It’s never too early to teach or learn good money habits and we are strong advocates of beginning financial education at an early age. At a minimum, we want our children to understand how money is earned, saved, and used to help others. The key is to keep them engaged. Earning an allowance and having them contribute to their nonessential purchases is a good introduction to making spending decisions. Just playing a game of Monopoly can teach them something about risk and reward! The national non-profit coalition Jump$tart is committed to raising awareness about the importance of financial education among our youth through teacher education and other valuable resources. It’s no longer just about learning to balance a checkbook; along with the basics, today’s students will need to be equipped with online banking and investing skills. Financial literacy can help students recognize economic opportunities and prepare for economic hardships throughout their lives thereby enhancing their ability to achieve financial well-being.

The bottom line is that not being financially literate could cost you money and affect how much you earn, save, and invest. Why not use this month to take stock of your financial situation and make a commitment to take your financial knowledge to the next level.

For more ideas and information on how to celebrate Financial Literacy Month, call the Knox Grove Team at 609-216-7440.